UNESCO/Éditions de l’Aube, 1999
(to be published by Curzon Press, UK, 2002)[**]

The history of organised crime and of the recycling
of its profits cannot be separated from the politics of the surrounding
society. This book makes the point vividly by drawing a parallel between
the colonisation of Asia before 1914, which was financed in part by the
illicit opium trade, and the post-Cold war globalisation, which favoured
Mafia-like tendencies in many emerging countries, such as China.

The corruption of the system which develops easily
in the new context of commercial and financial globalisation, facilitates
the formation of a true criminal economy, based on the use or the threatened
use of violence, infiltrating governments at the provincial or even central
levels.

As this economy grows and its benefits are recycled -a
process of which the best known and most analysed aspect is the drug
trade- they come to play a significant role in the multiple crisis
of the international financial system. The author demonstrates this convincingly
through the examples of Japan, Mexico, Thailand and Russia. His argument
could be extended to the financial crisis which shook Argentina and Turkey
in 2000-2001.

The uneventful slide from everyday corruption to a genuine
criminal economy, marginal in relation to the formal economy, but aggressive
and influential in political terms, creates a race, each stage of which
influences the very nature of the globalisation process.

CONTENTS

Introduction

I/ The mirror of history Opium and colonization

II/ Drugs and post-communism: the Chinese Case The rise of drugs trafficking and consumption in
China
The new drugs war
The expansion and diversification of drugs supplies
Yunnan : drugs and geo-politics in Sino-Burmese
relations

III/ The socio-economic stakes of drug trafficking The laundering matter
The role of off-shore banking

IV/ Japan: the Yakuza recession Lessons from the Japanese crisis

V/ Crisis and laundering in Mexico: from the "tequila effect" to
the "cocaine effect"

VI/ Crisis and laundering in Thailand: the provincial godfathers'
launch on Bangkok

Conclusion

Introduction

As of the end of the Cold War the world is witnessing wide-spreading corruption,
organized crime, and drug trafficking and consumption. This book attempts
to sort out the ties between these three phenomena on the basis of evidence
which points to their convergence in the 19th century and currently,
to the extensive encroachment of the illicit economy. The UN and IMF estimate
current organized crime turnover at one trillion dollars. That which is
the equivalent of 4% of global GDP. At least 50% of this sum corresponds
to earnings from narcotics trafficking, the sector which is best known.
Indications are that criminal networks do not limit their activities solely
to drug trafficking but that organized crime partakes in all other forms
of illicit profit, namely, smuggling; arms and fissionable materials trafficking;
slave trade and prostitution procurement; dangerous waste and toxin products
export; the theft of cars, art objects andarchaeological pieces,
and other activities of the sort. What we are seeing is the strengthening
of multiservices networks as of trade globalization.

The mirror of history, as seen in the first chapter through the example
of the Middle Empire, and more generally that of Asia, projects the image
of the incestuous ties knit between opium, colonial accumulation, and corruption.
The end of the Cold War signals a market economy expansion at a planetary
scale similar to that which prevailed before the World War I (1914-1918).
This movement is accompanied by a comeback of illicit economy, drug trafficking,
and corruption in emerging and transition countries. The Chinese example,
developed in the second chapter, allows us to analyze the institutional,
social and geopolitical issues tied to the resurgence of drugs in a country
from which opium had been eliminated after the 1949 revolution.

The third chapter deals with the economic effects of the narcotics traffic,
and more widely of organized crime, as of the money laundering issue. One
of the essential paradoxes of drug policies relates to the fact that criminalization
is enforced at the consumption level whereas money laundering ¾the
center of gravity of the economic market¾
basically goes unpunished. Despite calls for decriminalization of consumption
by numerous doctors and even Interpol General Secretary, Raymond Kendall,
prisons are crammed with user-dealers who are to provide the future criminal
work force in the USA. Thus, for example, two thirds of all inmates have
serious drug abuse problems.

The clamor which is kept up regarding drug consumption contrasts with
the relative silence surrounding the laundering of narcoproceeds. Although
the pointers pile up, one after the other, through a series of judicial
scandals involving highly-placed persons, including several heads of state,
public opinion still does not clearly perceive the qualitative changes
attained by “elite-level” delinquency. Not too long ago, robbing a bank
was one of the most profitable crimes there was. Nowadays, however, it
is far more profitable to get the money into the bank. The principal threat
comes, not from the bank robber, but from the banker who is paid off to
keep quiet regarding these transactions. In other words, corruption
becomes the weapon used to commit the crime. The banking profession
is fairly well respected and has an image which is far from the temptations
to which it is a prey. It remains sheltered from the suspicions of a public
opinion otherwise generously provided with anecdotic details regarding
the mafia.. Extremely high earnings of globalized financial markets have
accustomed many operators to wide profit margins which are hard to reach
through actual production processes but which can be easily negotiated
through laundering activities, which have a turnover of up to 25% or 30%
on the monies invested.

Convergence of the licit, illicit and criminal spheres owes much to
this financization dynamic and to the anonymity enjoyed by users of off-shore
banking systems. Its effects, already being loosely studied by the IMF,
are quite significant, as recounted in the pages of this book which tracks
the ties between money laundering and financial stabilization in the Mexican,
and later Thai and Japanese crises, which spilled over to all of Asia and
the rest of the world. If organized crime’s best ally is the fear it inspires
and the silence it maintains, the time has come to disclose the prosperities
to which it resorts to build its economic and political expansion.